Fifty six percent of Americans in the workforce don’t feel they’re where they should be with their retirement savings, according to a study performed by Bankrate.1Being prepared for retirement is important, and financial experts recommend saving as early as possible to ensure you’re prepared to enjoy those golden years worry free. However, as you get older, what saving looks like and what portfolios you’ll invest in may change. If you’re looking for brief advice on how these investment strategies may change as you advance through life, continue reading below.
Young Investor
When you’re still young and just starting off in your career, the idea of investing can be daunting. However, financial professionals may suggest that you create a budget and invest as much as you can – within reason. Investing as much as you can while you’re young will increase the odds of seeing a larger yield on return later in life.
At this stage in life, it’s pretty appropriate to invest aggressively, focusing on moderate-to-high-risk portfolios.
As you get older and move into marriage and start a family, it’s important to continue to set money aside each month for your future. This number may fluctuate based on extenuating circumstances like loss of employment, unexpected medical bills, and more, but any little bit will help.
Peak earning years
Most people peak in how much they’re earning in their 40s and 50s.2 During these times, your financial professional may advise you to invest as much as possible and max out all contribution limits. The contribution limit in 2024 for Traditional and Roth IRAs is $7,000 each, and $23,000 for 401(k)s and other employer-sponsored plans.3
Approaching Retirement
As you approach retirement, it’s important to continue saving, but most financial professionals may recommend you diversify your portfolio and start investing in a lower-risk portfolio. Oftentimes, this will mean increasing the amount of bonds you’re invested in, as they’re generally considered a safer investment.
Regardless of where you are in life, saving for your future is an important and necessary part of life. For the best investment strategies and advice, consider consulting with a financial professional.
The opinions contained in this material are those of the author and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reputable, but Cetera Advisor Networks LLC cannot guarantee or represent that
it is accurate or complete. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefits should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state’s 529 Plan.
Some IRAs have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.
1 Gillespie, Lane. “Survey: 56% of Americans feel behind on saving for retirement.” Bankrate, 27 Sep 2023. https://www.bankrate.com/retirement/retirement-savings-survey/. Accessed 21 Mar 2024.
2 Elkins, Kathleen. “Here’s the age at which you’ll earn the most in your career.” CNBC, 02 Nov 2018. https://www.cnbc.com/2018/11/02/the-age-at-which-youll-earn-the-most-money-in-your-career.html. Accessed 21 Mar 2024.
3 “401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000.” Internal Revenue Service, 01 Nov 2023. https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000. Accessed 21 Mar 2024.
